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Got A Negative Balance On A Credit Card? Here’s What You Can Do.

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Got a negative balance on a credit card? Here's what you can do.

Got A Negative Balance On A Credit Card? Here’s What You Can Do.

A negative balance on a credit card is neither bad nor uncommon. It doesn’t mean anything is wrong, and absent anything strange, you aren’t going to have your account closed. When you have a negative balance on a credit card, there are some laws that apply. Depending on what bank your credit card is from, your options on how to handle that negative balance (credit) can change. Let’s take a look.

Update 9/9/22: I (Mark) was able to do this yesterday via chat with Amex.

Why Do I Have A Negative Balance On My Credit Card?

The short answer on why you have a negative balance on your credit card is that you overpaid. That doesn’t mean you’re bad at math. Something happened. The most common scenario is a return/refund. Your credit card balance was $500. You paid it off on February 10th. However, that same day, you returned something worth $100. You now have a negative balance on your credit card of -$100. The bank essentially owes you money, and you have some options.

What Are My Options?

Depending on the credit card issuer, your options on what to do with a negative balance on a credit card are different. First, there are the legal considerations. Most banks follow this and nothing more. They aren’t required to go beyond the legalities.

The Legal Stuff

According to U.S. law, if you have a negative balance and don’t make any charges on your card, the balance isn’t resolved. The bank is required to try to get that money back to you. This comes into play at the 6 month mark, if your balance is still negative. The bank has to try to find you and cut you a check to give the money back to you. Assuming the card is still open and they know how to reach you, it should show up in the mail at the address on your account.

Your Legally-Guaranteed Options

You have several options when dealing with a negative balance.

  1. Wait until the 6 month mark and let the bank cut you a check. This seems like the worst option, since you’re letting the bank keep your money for a long time.
  2. Ask the bank to send you a check. Different banks have different rules on the timeline for this. However, if you still have a negative balance after more than a week (some banks say 10 days or a month), you can ask to have the funds sent to you via check. Ask if there are fees associated with this before accepting.
  3. Have the bank deposit the funds in your checking account. This requires a banking relationship with the credit card issuer. It’s not likely that Bank of America will wire the funds into your Chase account, etc. However, if you have an account with the card issuer, ask for the cash to deposited. Again, make sure there aren’t hidden fees here.

Are There Other Options? Yep. My Favorite.

Wondering if there are any other options? The answer is “yes” — or, more realistically, “depends on the bank”. Some banks offer my favorite option: apply the negative balance on a credit card to another credit card.

Not all credit card issuers will do this, however. Here are the policies by credit card issuer on whether you can apply the negative balance on credit card A towards what you owe on credit card B:

  • American Express: yes, even between business cards and personal cards
  • Bank of America: no
  • Barclays: no
  • Capital One: no
  • Chase: yes, even between business cards and personal cards
  • Citi: yes, but not between personal/business (because these are not in the same log-in account)

It’s important to note that this does NOT count as a payment. If you have a negative balance of -$50 on your account and transfer that to another card, it’s not a $50 payment. This will not satisfy the card issuer’s minimum payment requirement. You still need to make a payment that month.

Negative Balance On A Credit Card

Can I Do This To Increase My Credit Limit / Credit Score?

No. This will not help your credit score, because the banks don’t report anything other than not needing to pay/$0 balance. It won’t make you look extra special and boost your score.

It also doesn’t increase your credit limit. Having -$100 on a card with a credit limit of $10,000 doesn’t mean you can charge $10,100 now. I’d also not recommend trying to create a negative balance to charge more than your limit and do something called credit cycling (great explanation here). Banks hate that.

Do The Banks Get Mad?

No. It happens to everyone at some point. However, if it becomes a regular thing, expect attention you don’t want. Capital One specifically says overpaying significantly can lead to account freezes / shutdowns (you don’t want to wind up on a black list or have a shutdown, FYI). Banks see this as a possible sign of money laundering when you consistently create a negative balance on credit card statements.

Final Thoughts

Having a negative balance on credit cards isn’t positive or negative in itself. It can happen from refunds (most likely) or accidentally overpaying. Every once in a while, you’re fine. If you’re doing this all the time, expect negative repercussions. We also looked at policies by banks on whether you can transfer this negative balance to another card with that same bank. Now you know your options for what to do in this scenario.

Disclosure: Miles to Memories has partnered with CardRatings for our coverage of credit card products. Miles to Memories and CardRatings may receive a commission from card issuers.

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Ryan Smith
Ryan Smith
Travel hacker in 2-player mode, intent on visiting every country in the world, and can say "hello" or "how much does this cost?" in a bunch of different languages.

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  1. There’s an option to do this on Amex website, just click the payment tap at the top and it should have a link saying refund credit balance or similar at right middle side of the page

    • There are refunds etc. Mine was from paying the annual fee before the statement due date and then closing it so getting a refund after closure. There are lots of reasons you may end up with a negative balance. What if you cancel a cruise or expensive hotel stay etc.

  2. I just had this in 3 AMEX cards. 1 plat with -$200 & Hilton with -$250 from my Delta airline credits for this year. I also had another $150 double payment. My cards are set for Auto pay my card was due on Feb 17 (holiday) i did not see the auto pay kick in so I manually made a payment, next day 18th (day late) the auto payment kicked and i had a double payment. I made an online payment dispute for the 3 negative balance cards to transfer to my main AMEX card.

      • Only downside is you must manually enter your card # for the transfer. Not a huge deal I just feel they could make it easier after you click internal transfer offer a drop box so you can simply click on the card you want the transfer to go to.

    • Yeah, definitely not advocating overpaying on purpose. It happens by accident sometimes, and some of them will immediately refund the overpayment.


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